Every business must
continually change or it will eventually die. Sometimes the
decision to change is provoked by external threats, at other
times it is in response to an opportunity. Whatever the cause,
the way to make really effective change, that grows profit
and generates cash, requires a business plan and for that
plan to be implemented.
Business plan
We are not only accountants but we have hands-on experience
of running businesses. This mix of skills enables us to find
out what has happened in the past, and prepare a financial
analysis in terms that you understand. It will probably be
based around a set of accounts. The difference is that the
accounts will include information that reflects the way that
you think about the business, such as sales by salesman and
by product, sales by customer, and margin by product and by
customer;
A simplistic analysis of such results produces conclusions
such as "we should stop making product x" because
it makes too little margin or "get rid of salesman y"
because his sales are low. But with our business experience
we know that some products are loss leaders and lead to higher
margin sales with key customers, and that a salesman working
in Scotland will produce less than one working within the
M25.
We can quickly assimilate these qualitative elements and
work with you to prepare a business plan, supported by flexible
forecasts, that creates a compelling vision of the company's
growth in profit. The business plan will be derived from the
analysis work and so it will be built up from the key drivers
which we identified. This provides a very clear road map on
which to manage the business. It has two principal benefits:
| 1. |
It makes each manager's targets clear and shows how
they relate to the overall results. So, for example, once
it is understood by all parties that salesman x has a
realistic target he can be better motivated. And we would
also make sure that his costs are realistic and adhered
to; |
| |
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| 2. |
It can easily be flexed to gauge the effect of
changes in these targets and assumptions. So if you
decide to close a territory it is removed from the figures
and we don't compare actual results to a budget that
has become irrelevant. |
Have a look at the examples
to see what we mean.
Implementation
The plan will identify one of two types of solution that
need to be implemented:
- An incremental change in the existing organisation;
- A step-change by either sale or flotation.
Incremental change
You probably only have sufficient resource within
the organisation to run the existing business, not to effect
the change. By utilising a flexible resource such as ours
you will be able to complete the project in a reasonable time
frame.
Not only will we manage the project for you, we can also
assist in its execution:
- Firstly we can make sure that you have enough cash. We
can assist you with finding funders, and making presentations
to them, negotiate terms and complete the transaction. We
recently obtained a £10m funding package of loan finance
and invoice-discounting for a new factory (for our client
not for us!).
- Secondly we can specify and install the systems necessary
for keeping management information and controls up to the
standard of accuracy, timeliness and relevance that is appropriate
for the enlarged business. We have considerable experience
of the leading software packages, Sage, Navision and Sun
Accounts;
- Finally we will ensure that the results match your expectations
or provide you with explanations as to where and how variances
have arisen. Solutions are not always obvious or straightforward
but we are always looking for them. In particular we often
find methods of reducing costs that are widely applicable,
and will implement them too.
Step-change
It may be that the business would best be served
by being sold or floated.
If so the business will be rigorously examined ("due
diligence") to ensure that it is capable of meeting its
targets. We can identify if there are any weak points in the
systems of internal control that may prevent this from happening.
If there are any, we can produce viable recommendations for
rectifying them, and implement them.
We can also take a broader approach to the problem. We recently
finished a two-year project with a manufacturing company whose
managing director wished to retire but had previously failed
to elicit any substantial offers. We identified that profitability
was inadequate and why, and assisted with reducing costs and
changing the type of work undertaken. These actions led to
improved tenders and better margins, which formed the basis
of the sale to a US purchaser. And there were no problems
with due diligence either. |
